Welsh Ministers have updated how self‑catering properties in Wales are assessed for non‑domestic rates. The Order takes effect from 1 April 2026 and adjusts the definition of “domestic property” in section 66 of the Local Government Finance Act 1988 for holiday lets, adding limited new flexibilities while keeping the main tests in place. (media.service.gov.wales)
The statutory criteria introduced in 2023 remain the foundation. To be treated as non‑domestic, a self‑catering unit must be intended to be available for short‑term commercial letting for at least 252 days in the coming year, must have been available for at least 252 days in the previous year, and must have been actually let for at least 182 days in that previous year. These thresholds are unchanged by the new Order. (legislation.gov.uk)
A new multi‑year averaging route is added for the 182‑day “actually let” requirement. Where a unit falls short of 182 days in the immediately preceding year, it can still qualify if the average number of days let across the preceding two years, or across the preceding three years, is at least 182 per year. This is intended to smooth volatility in trading patterns. (media.service.gov.wales)
The change sits alongside Wales’ existing “site averaging” rule, in place since April 2016, which permits businesses with several units at the same location or in very close proximity to use a single‑site average to meet the letting‑days test. The Order allows the new multi‑year average to be used even where last year’s days were themselves calculated using that site average. (legislation.gov.uk)
A targeted charity provision is also introduced. Up to 14 days a year can count towards the letting and availability tallies where the unit is provided, free of charge, for short stays to the beneficiaries of a charity under an arrangement with a charity registered under section 30 of the Charities Act 2011. (media.service.gov.wales)
Timing is specific. The multi‑year averaging applies to assessment days on or after 1 April 2026. The charity provision applies to stays beginning on or after 1 April 2026. Owners should ensure their records distinguish qualifying charity use from commercial bookings from that date.
For operators, the practical impact is twofold. First, the 252‑day availability tests remain hard gates, so marketing calendars, platform listings and contracts should evidence availability across at least 252 days. Second, the new averaging route gives a safety net for the 182‑day letting test after an atypical year; keep contemporaneous evidence such as booking confirmations, platform statements and ledgers for the full two‑ or three‑year period.
Where a unit fails the tests, classification can move to domestic property with liability for council tax, potentially including any local premium. The Welsh Government’s guidance reiterates that classification depends on use and on meeting the statutory criteria, not on the property’s design. Owners should monitor status continuously and adjust quickly if criteria are missed. (gov.wales)
The changes arrive alongside wider non‑domestic rating reforms scheduled for 1 April 2026, including the revaluation, the introduction of differential multipliers and a two‑year transitional relief scheme capping bill increases above £300. These measures do not alter classification tests but shape bills for those remaining in the rating system. (gov.wales)
Example scenarios help. A cottage let for 165 days in 2025/26 would ordinarily fail the 182‑day test; if it achieved 200 days in 2024/25, the two‑year average is 182.5, so it qualifies from 1 April 2026 provided the 252‑day availability rules are also met. Similarly, a three‑year run of 160, 200 and 190 days yields an average of 183.3, which meets the letting threshold for classification purposes.
For charities and partners, ensure the arrangement is documented with the registered charity and that stays are genuinely free to beneficiaries. Only up to 14 days per year can be counted, and those days sit within, rather than replace, the overarching 252/182 framework. Operators should keep a clear audit trail to satisfy the Valuation Office Agency if asked. (legislation.gov.uk)